Macro Economics Assignment Help

Macro Economics Assignment Help | Macro Economics Homework Help

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About Macro Economics:

Macro economics is the branch of economics that deals with the

study of performance, structure and behaviour of the entire

economy on the basis of certain indicators such as GDP,

employment rate, price indices etc.Macroeconomists develop

models that explain the relationship between such factors

as national income, total output, consumption,

unemployment, inflation, savings, investment, international

trade and international finance. Macro Economics Assignment

Help is a very broad field as compared to Micro economics. Micro

economics is confined to a single firm or consumer & its behaviour. But Macro economics

focuses on the behaviour of a economy as a whole. It is the study of understanding the

causes of short long fluctuation in the national income and the determinants of long run

economic growth.

Sample Macro Economics Assignment Help Questions and Answer:

Depreciation Sample Question

Question -1.

Given the following values

C = 500 + 3

4 Yd

I = 400

G = 100

T = 60

Calculate:

(i) The equilibrium level of national income.

(ii) The consumption expenditure at equilibrium income level.

Ans.

(i) Y = C+ 1+ G.

Y = 500 + 3

4 (Y – 60) + 400 + 100

Y = 500 + 3

4 Y – 45 + 4000 + 100

Y- 3

4 Y = 500 + 400 + 100 – 45

1

4 Y = 955

Y = 3820

(ii) Consumption at equilibrium level of income (3820)

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C = 500 + 3

4 Yd

and Yd = 3820 – 60 = 3760

C = 500 + 3

4 (3760)

= 2820.

We can check the answer by putting value of C, I, G in the equation

Y = C + I + G

i.e., 3820 = 2820 + 400 + 100

3820 = 3820

Or Y = AE.

Question 2.

Given the following values

C = 40 + 0.8Yd

I = 60

G = 40

T = 20

Calculate :

(i) The equilibrium level of national income.


(ii) It full employment income is 700, how much increase in government expenditure be

made to each full employment.

(iii) How much should tax be reduced to reach full employment income level :

(i) Equilibrium level of national income

Y = C + I + G

= 40 + 0.8Yd + 60 + 40

= 40 + 0.8 (Y -20) + 60 + 40

= 140 + 0.8Y – 16

Or Y-0.8Y = 140 -16

0.2Y = 124

Y = 124

0.2

= 620.

(iii)Increase in government expenditure required to reach full employment income of 700. If

Yf is the employment income, then required increase in income

∆Y = Yr – Y

= 700 – 620

= 80

Now, ∆Y = K∆G

and k = 1

1−𝑏

1

1−0.8 or

1

0.2 = 5

So, ∆Y = 5 × ∆G

Or ∆𝐺 = ∆𝑌

5

= 80

5

= 16

So, increase of $ Required in G to reach full employment.

(ii) Reduction in tax (T) to reach full employment income level of 700.

∆Y = Yf – Y

= 700 – 620 = 80

Tax Multiplier KT = -𝑏

1−𝑏


= -0.8

1−0.8 = -4

∆Y = KT ∆𝑇

Or ∆T = ∆𝑌

𝐾𝑇

= 80

−4

= -20

So, a reduction of$ 20 in tax is required to achieve the full employment income level.

Question. 3 Find the equilibrium level of national income when

C = 100 + Yd

I = 1000

G = 100

T = 100

M = 0.25Y

And X = 500.

Ans. The equilibrium level of national income in an open economy

Y = C + I +G + (X–M)

= 100 + 0.8 (Y -100) + 1000 + 100 + (500 – 0.25U)

= 100 + 0.8Y – 80 + 1000 + 100 + 500 – 0.25Y


= 0.8Y – 0.25U – 80 + 1700

Or Y = 0.55Y + 1620

Y – 0.55Y = 1620

Or 0.45Y = 1620

Or Y = 1620

0.45

= 3600.

Question .4. Calculate the equilibrium level of income with the following data :

C = 100 + 0.8Yd

I = 250

G = 170

t = 0.1Y

NX = 540 – 0.25Y


Ans. Y = 100 + 0.8 (Y-0.1Y) + 250 + 170 + 540 – 0.25Y

= 100 + ( 0.8 × 0.9Y + 250 + 170 + 540 – 0.25Y)

= 0.72Y – 0.25Y + 100 + 250 + 170 + 540

= 0.47Y + 1060

Y – 0.47Y = 1060

0.53Y = 1060

Y = 1060

0.53

= 2000.

Macro Economics Assignment Help

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